Tanzania is the largest source of foreign direct investment (FDI) to Kenya among member states of the East African community (EAC).

Investors from Dodoma have pumped in a total of $72.45 million in Nairobi in the last six years highlighting the growing appeal of the Kenyan economy to regional and foreign investors despite continuous trade dispute with Tanzania over non-tariff barriers (NTBs).

Latest data by the EAC Secretariat shows that Dodoma has been the top most investor in Kenya in the period running from 2018 to 2023 with a total of $72.45 million invested in 19 projects, followed by Uganda and Rwanda which invested $36.91 million and $3.69 million respectively.

According to the data that is contained in the EAC trade and investment report (2023) Burundi and the Democratic Republic of Congo (DRC) invested $2.01 million and $250,000 in Kenya respectively during the period under review while South Sudan invested $190,000.

Read: Moderna, Taifa Gas deals lift Kenya’s FDIThe major investors in Kenya however came from the rest of the world putting a massive $3.75 billion into the Kenyan economy during the period.

Investors are mainly interested in putting money in key sectors including manufacturing, transport, communication and storage, finance and insurance.

Other sectors were real estate and business services, agriculture, fishing, forestry and hunting, wholesale, retail trade and tourism and construction.

Overall intra EAC planned investments declined by 5.6 percent to $567.17 million in 2023 from $600.78 million in 2022 with the number of projects also decreasing to 72 from 76 in the same period, according to the report.

Uganda attracted the most intra-EAC investments worth $280.74 million though it was a drop from $391 million in 2022, followed by Burundi ($155.18 million).

Burundi intra-EAC investments projects increased from two to four while their value rose from $1.9 million in 2022 to $155.18 million in 2023.

Rwanda’s intra-EAC Investment inflows jumped to $55.16 million from $46.78 million and the number of projects rose to 18 from 15.

The report shows that Kenya’s intra-EAC investment fell to $1.32 million in 2023 from $22.6 million in 2022 while that of Tanzania declined to $74.77 million from $138.5 million in the same period.

Despite growing interest of Tanzanian investors in the Kenyan economy the two countries are still embroiled in on-and-off trade disputes over non-tariff barriers (NTBs) that are stifling business between them.

Last year (2024) the two countries resolved to address at least 14 NTBs following a, meeting between President William Ruto and his Tanzanian counterpart Samia Suluhu in 2023.

The meeting considered 14 issues six from Tanzania and eight from Kenya and provided direction for their resolution. However of the 14 only three were fully resolved.

Tanzania continues to deny Kenya import permit for poultry and poultry products including day-old chicks, hatching eggs and meat.

Last week Dodoma hit Nairobi with fresh protectionist levies on eggs, dairy and meat as well as confectionery such as biscuits upsetting the EAC customs unions rule and cutting export earnings.

The fresh tariff war threatens to reopen another round of on-and-off frosty trade ties between the two countries.

The Kenya Association of Manufacturers (KAM) said Dodoma has slapped a 25 percent excise duty on exports of hatching eggs to Kenya contrary to the spirit of the EAC Customs union.

Kenya and Tanzania have largely been involved in persistent trade wars over tariff and non- tariff barriers to trade prompting intervention by respective ministries and sometimes Heads of State.

Despite tiffs over trade barriers data shows Tanzanian investors still consider Nairobi a worthwhile destination.

Read: Ruto launches building of $130.5m LPG plant in MombasaSeveral business tycoons from Dodoma have made massive investments in Kenya, some through acquisitions of Kenyan companies.

Among notable Tanzanian investors in Kenya include Rostam Aziz who through his Taifa Gas is building a multimillion dollar 30,000 tonne cooking gas plant and storage facilities in Mombasa worth Ksh16.9 billion ($131 million) and Ally Awadh who is also building a similar but smaller facility at 10,000 tonnes.

Mr Awadh is the founder of Tanzania’s Lake Oil that acquired the Petroleum retail division of Kenya’s Hashi Energy for undisclosed fee in 2017.

The family of Tanzanian business tycoon Abdallah Nahdi through Amsons Group has also successfully acquired Bamburi cement at deal estimated at $180 million.

In 2017, Tanzanian investors Aunali and Sajjad Rajabali bought 30.2 million shares equivalent to a 2.06 percent stake in oil marketer Kenokobil rising to the list of the oil marketers top shareholders.

In 2016 Tanzanian Bank M became the first lender from the neighbouring country to take over a Kenyan institution when it acquired a 51 percent stake in Oriental commercial bank.

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